Economy of Italy Under Fascism - Fascist Economic Policy

Fascist Economic Policy

Benito Mussolini came to power in 1922 and tried to transform the country's economy along fascist ideology, at least on paper. In fact he was not an economic radical, nor sought a free-hand in the economy. His main interest was to use economic power to politically reshape the Italian state to fit his ideological outlook. He aligned himself with industrial interests and forged a modus vivendi with the ruling groups of Italian capitalism. As in Nazi Germany the economic policies of Mussolini are difficult to define. There is a messy tangle between economic theory and economic practice which leads to two opposing views - either Mussolini had an economic plan, or that he did not, but instead reacted to changes without forward planning.

To proponents of the first view, Mussolini did have a clear economic agenda, both long and short-term, from the beginning of his rule. The government had two main objectives - to modernize the economy, and to remedy the country's lack of strategic resources.

To stimulate development Mussolini pushed the modern capitalistic sector in the service of the state, intervening directly as needed to create a collaboration between the industrialists, the workers, and the state. The government crushed fundamental class conflicts in favour of corporatism. In the short term the government worked to reform the widely-abused tax system, dispose of inefficient state-owned industry, cut government costs, and introduce tariffs to protect the new industries.

The lack of industrial resources, especially the key ingredients of the industrial revolution, was countered by the intensive development of the available domestic sources and by aggressive commercial policies - searching for particular raw material trade deals, or attempting strategic colonization.

Some historians, however, have argued that Mussolini had essentially no grasp of economics and that Italian fascism was actually a negative force on the Italian economy - holding back genuine modernisation and badly distorting economic development, even before the war.